Over the last decade, cryptocurrency has evolved from a fringe millennialist hobby and conversational ice-breaker to a daily reality of modern-day life. The implications of emerging digital currencies like Bitcoin and Ethereum—which exist via a transaction tracking technology known as blockchain—are sweeping, affecting everything from private purchases to the way local governments conduct business.
Bitcoin, in particular, made national headlines a few weeks ago when the FBI was able to digitally recover 63.7 of the 75 bitcoins (approximately $4.4 million) paid as ransom during Colonial Pipeline hack. But while digital currencies might seem at first glance to be a little more glamourous, government entities across the nation are taking note of blockchain technology, which serves as the backbone of cryptocurrency and could be implemented into everyday transactions like tracking home purchases or tracing objects in the supply chain of a large-scale government purchasing system.
“Blockchain will empower cities to innovate how they work with local businesses, and invest in and improve efficiencies across many areas, such as transportation, energy and voting. Beyond city operations, blockchain promises to innovate the way we start businesses, structure investments and account for wealth creation and exchanges,” reads a report on the technology created by the National League of Cities.
When used within municipalities, blockchain allows “agencies to create a single, trustworthy collection of digital identity documents. These documents make it easier for government officials to reconcile data conflicts and provide citizens with control over their own identity,” explains an information sheet distributed by IBM. This “trustworthy” digital chain is comprised of a series of timestamped blocks, with each one linked